US labelling provisions violate WTO's TBT agreement
6th July, 2012
The Appellate Body of the DSB in the World Trade Organisation has partly upheld the Panel Report when it held that the US COOL provisions which impose an obligation on retailers selling specific products in the United States to label those products with their country of origin are violative of Article 2.1 of the Agreement on Technical Barriers to Trade as they accord less favourable treatment to imported livestock.
The Appellate Body held that the mandatory provisions create an incentive for processors to exclusively use domestic livestock and act as disincentive against using like imported livestock. It, however, reversed the panel findings as far as Article 2.2 of TBT is concerned and has held that the panel erred in finding that "the COOL measure does not fulfil the identified objective within the meaning of Article 2.2 because it fails to convey meaningful origin information to consumers”.
As per the COOL provisions an article could be marked as of US origin when the livestock from which it is processed was born, raised and slaughtered in US only.